Post by QTS Global

Results from a KPMG survey conducted at the end of 2025 offer an interesting insight into multinational companies' outlook on China. Despite near-term economic headwinds and slower growth, MNCs remain notably more bullish on China than on many other global markets. Most respondents indicated they are either maintaining or increasing their investments, reflecting strong confidence in China's long-term prospects over the next three to five years. The survey also highlights how deeply many organizations have localized their operations in China. Research and Development, Manufacturing, and Supply Chain functions have increasingly been established within the country, demonstrating a commitment that goes far beyond market access alone. What is driving this confidence? At the top of the list is digitalization. Companies are prioritizing investments in data analytics, IT infrastructure upgrades, and emerging technologies to enhance competitiveness and efficiency. As AI adoption accelerates, cybersecurity has become a critical component of this transformation. MNCs remain heavily invested in Chinese-developed technologies and AI capabilities. However, success will depend on their ability to navigate differences between domestic and international standards. Bridging cybersecurity compliance gaps remains a significant challenge, but it is essential for maintaining trust, resilience, and sustainable growth. To thrive in this evolving environment, organizations must continue adapting governance frameworks, strengthening cross-border cooperation, and embedding security and compliance considerations throughout the innovation lifecycle. Looking ahead, many companies are focused on high-growth sectors within China's economy, including electric vehicles, medical and biotechnology innovations, water and energy technologies, advanced materials, and robotics. The message from global businesses is clear: while short-term challenges remain, long-term confidence in China's innovation ecosystem and market potential continues to drive investment and strategic commitment.